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March 2011

In This Issue
Lumber Prices Track Forecast
Northwest Log Prices Recover
Participate in the Logging Business Survey
RockTenn/Smurfit Merger
Proposed Rule for Forest Planning for National Forests
Housing Update
Quick Links

  
 

Top 3 Stories from the February Issue

 


LUMBER PRICES TRACK FOREST2MARKET'S 2011 FORECAST

 

In the February issue of Building Products Digest, Bill Nocerino-Forest2Market's lumber division manager-wrote the following:   

Happy New Year 2011

We project SYP lumber prices will peak in the $375/mbf range sometime in the spring and then start to retreat as the hot summer months arrive. The difference between 2010 and 2011 will be the speed at which we reach those peak prices. The dramatic week over week rises we saw in 2010 will be a thing of the past. Instead, we expect a more balanced, less aggressive rise as the peak buying season approaches.

 

Mill2Market, the weekly lumber price report that is published by Forest2Market every Thursday at 5:00 p.m. eastern standard time, has-so far-confirmed this projection.

 

  
NORTHWEST LOG PRICES RECOVER THANKS TO CHINA AND PULP AND PAPER
 
Northwest log stack

Chinese demand for logs and healthy pulp and paper demand have led to a turnaround in Northwest log prices, tightening margins for saw and plywood mills. Prices have eclipsed the levels set May 2010, when a brief spike in lumber prices drove Douglas fir domestic logs over $525/MBF for the first time in two years.

 

In January 2011, domestic Doug fir eclipsed $550/MBF in Western Oregon and Washington, a response to firming lumber prices and vigorous competition from export log purchases. Whitewood, more than any other species, has attracted the attention of Chinese buyers. Average hemlock export log prices rose beyond the $550/MBF level in January, a 30 percent increase in twelve months. Just a short time ago, hem-fir was difficult to sell. Eager to secure wood to build their growing economy, however, Chinese buyers have picked up the slack.

 

  
 

MAKE SURE YOUR VOICE IS HEARD:  PARTICIPATE IN THE 2011 LOGGING BUSINESS SURVEY

 

Truck Hauling Timber

Since 2007, when the economy and housing market crashed, the logging industry has teetered on the edge of crisis (see our story on the impending logging crisis in Sept. 2009's Forest2Mill newsletter). With logging companies in every region of the country closing their doors and with younger loggers choosing other, more lucrative, ways of making a living, the industry's ability to snap back quickly when the market recovers has been a subject of concern.

 

Have things changed since 2009?


For More Information and To Participate...

ROCKTENN POISED TO BECOME #2 CONSUMER OF RECOVERED PAPER

  
When RockTenn announced at the end of January that it would acquire Smurfit-Stone, the balance of power in the industry shifted. Once the acquisition is complete-pending shareholder approval-the combined company will be the second largest producer of containerboard in North America. The company will also be the second largest consumer of recovered paper, second only to International Paper. RockTenn's annual consumption of recovered paper will be approximately 4.5 million tons, just marginally below International Paper's. Of that 4.5 million, roughly 3.3 million will be OCC.
  
RockTenn had several objectives when it moved on the Smurfit-Stone acquisition. Strategically, the company recognized that containerboard has become a solid business, and that the outlook for the global market for virgin containerboard was strong. The company also wanted to rebalance its fiber mix and expand its geographic footprint.

  


 

 

COMMENT PERIOD ON PROPOSED RULE FOR FOREST PLANNING FOR NATIONAL FORESTS ENDS MAY 16

 

Forest2Mill August 2009

The last time the rule outlining the process and content requirements for land management plans for the nation's forests was updated, the Cold War was still raging and USA Today published its first issue. Clearly, much has changed in the last 30 years. Pest infestations have destroyed whole swaths of the nation's forests, wildfires pose greater risk to surrounding communities and the loss of timber industry jobs has devastated local economies. 

 

In order to make sure that today's land management plans are consistent with the environmental and economic needs of the 21st century, the Department of Agriculture has released a proposed replacement rule.

 

 

HOUSING UPDATE

 

House Sold

Once again, signals from the housing market were mixed in January. As Lawrence Yun, the chief economist at the National Association of Realtors (NAR), said: "While home buyers over the past two years have been exceptionally successful with historically low default rates, there is still an elevated level of shadow inventory of distressed homes from past lending mistakes that need to go through the system. We should not expect the recovery to be in a straight upward path-it will zig-zag at times."

 

More about the Housing Update... 

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